Traditional marketing is on life support. The rules of the game have changed. Tell and sell marketing no longer works. Today’s consumer is empowered. Empowered to find their own information, empowered to share their opinions and empowered to avoid marketing. Brands need to find ways to leverage their most important asset: current customers. More than ever, referrals and word of mouth are keys to future growth.
I was reminded of this over the weekend when I purchased a 27″ Apple iMac for my home office. For the second time in the last seven years, I opted to take advantage of Apple’s innovative One to One program. For $99 when purchasing an Apple computer at the store, customers can enroll in One to One. The program allows customers to received personalized individual instruction at the Apple store for one year. In the words of Carmine Gallo (Links to an external site.)Links to an external site.,
“The One to One program was created for one purpose: to build a customer for life. It’s based on a simple premise – the more a customer understands and appreciates a product, the more likely they are to make a deeper emotional connection with that product, and to return or to recommend the product/service to a friend.”
One to One allows customers upwards of to 52 hours of personal training for $99. An amazing value, Apple is investing into its current customers. Providing a convenient solution that drives loyalty and word of mouth. It begs the question for your business. How are you building customers for life?
This article makes the case for a shift towards focusing on current customers, in lieu of constantly chasing the prospect. Designing and creating experiences that reach the heart of the customer. It features five leadership lessons from pioneering brands such as Amazon, Apple, Disney, Southwest Airlines, TD Bank, Wells Fargo, and Zappos:
1. Sell More to Current Customers – Your current customers are your most lucrative marketing asset. Take care of the ones in hand, as opposed to the thousands in the bush. (Links to an external site.)Links to an external site.
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Wells Fargo understands this, driving the vast majority of its growth through its current customers. The bank focuses on servicing the needs of their current customers. This is a quote about cross-selling from their website (Links to an external site.)Links to an external site. in 2009:
“The more you sell customers, the more you know about them. The more you know about them, the easier it is to sell them more products. The more products customers have with you, the better value they receive and the more loyal they are. The longer they stay with you, the more opportunities you have to meet even more of their financial needs. The more you sell them, the higher the profit because the added cost of selling another product to an existing customer is often only about ten percent of the cost of selling that same product to a new customer.”
That last sentence deserves repeating. IT COSTS 10 TIMES THE AMOUNT TO ACQUIRE A NEW CUSTOMER THAN IT TAKES TO UPSELL A CURRENT ONE (Links to an external site.)Links to an external site.. Nearly eighty percent of Wells Fargo revenue growth comes from selling more products to existing customers. The average Wells Fargo customer carries over five financial products, which is more than twice the industry average.
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Focusing on the customer needs to start with senior management. Jeff Bezos created an obsession about customers at Amazon from its earliest days. This emphasis was brought to life by Bezos bringing an empty chair into meetings. The chair at the table represented the customer. The message was clear, the current customer was always top of mind and seen as the most important person in the room.
2. Exceed Expectations – Give your most current customers more than expected and go the extra mile. According to a survey by American Express called the Global Customer Service Barometer (Links to an external site.)Links to an external site., “93% of companies fail to exceed the expectations of their customers.” Great companies do “MORE.”
(Photo Credit: Canva)
Walt Disney was a big believer in the concept of doing the little extra to exceed expectations. He called it “plussing” the experience. According to Pat Williams, perhaps the best example comes from Disney historian Les Perkins’ account (Links to an external site.)Links to an external site. of an incident that took place at Disneyland during the early years of the park,
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“Walt had decided to hold a Christmas parade at the new park at a cost of $350,000. Walt’s accountants approached him and besieged him to not spend money on an extravagant parade because the people would already be there. Nobody would complain, they reasoned, if they dispensed with the parade because nobody would be expecting it. Walt’s reply to his accountants is classic: “That’s just the point,” he said. “We should do the parade precisely because no one’s expecting it. Our goal at Disneyland is to always give the people more than they expect. As long as we keep surprising them, they’ll keep coming back. But if they ever stop coming, it’ll cost us ten times that much to get them to come back.”
3. Convenience for the Customer – Take an outside in view and think about the convenience of your customers first (Links to an external site.)Links to an external site.. TD Bank bills itself as America’s Most Convenient Bank. The bank is open seven days a week and most nights until 8 p.m. Convenience has become a huge differentiator for TD. CEO Ed Clark elaborated on this (Links to an external site.)Links to an external site. in an interview with the Financial Post Magazine:
TD Bank branch (Photo credit: Wikipedia)
“The great thing about our model is if I put a branch on a corner in New York City, I know five years later I will have more than 25% of the local business, because at some time in that five years someone will come by at 4:02 pm. Their branch will be closed, they’ll look across at our store, this beautiful store, there will be someone giving dog biscuits to somebody’s dog, they’ll walk in and there’s a greeter that’s unbelievably friendly, and they’ll say, ‘So why am I banking at the guy across the street?’ On Sundays we send our bankers out to all the small businesses and say, ‘You’re open, we’re open, and you bank with the bank that’s closed.’… It’s a very simple concept: Just be open longer and give better service.” Clark also noted, for example, that their branch at 2 Wall Street, which opened five years ago, now has US1 billion in deposits.”
4. Think Value, Not Price – Compete on the value you provide. Price is relative. Almost five years ago Southwest Airlines made a bold move. When every other carrier decided to charge for checked baggage, Southwest didn’t think this was fair and created the program, “Bags Fly Free.” According to Jad Mouawad of the New York Times (Links to an external site.)Links to an external site., “The policy has turned out to be a good business move. Part of the growth in sales, Southwest believes, came from new customers fleeing bag fees.”
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The Bags Fly Free commitment also allowed Southwest to abandon its drive to be the low-cost leader. It now competed on the value provided. In addition to friendly service, extras like free bags, no cancellation fees, and no change fees drive value for customers.
5. Experience is an Investment – Giving something extra isn’t an expense. Giving something extra bolsters your brand (Links to an external site.)Links to an external site.. Take for example Zappos. Tony Hsieh and his team built a billion dollar a year business by selling shoes online. They did it largely without spending any money on traditional media. Instead, Zappos invested back into its customers by doing the little extras. The extras included free shipping both ways, overnight shipping upgrades, a 365-day return policy and top-notch customer service.
Tony Hsieh (Photo credit: Wikipedia)
CEO Tony Hsieh refuses to see the experience as an expense,
“Our business is based on repeat customers and word of mouth. There’s a lot of value in building up our brand name and what it stands for. We view the money that we spend on customer service as marketing money that improves our brand.”
What is the connection between marketing and customer service? 2. Of the five points discussed which two do you find most critical and why? 3. If you could insert a sixth point what would it be and why?
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